Retail business
- October 25, 2021

Guide For the Retail Business: Things to Know to Reach Modern Consumers

For the retail business, 2020 was a year dominated by change as the pandemic had an immense effect on industries around the world. The fashion industry in particular was hit hard as retail stores were forced to close for more than half a year.

According to Fortune Magazine, in the US alone 12,200 retail stores closed and consumer behaviour changed as a result of the covid-19 crisis. Let’s take a look at what retailers should consider when re-opening their stores, and what a start up should think of when launching a brand in 2021.

Online vs Offline

For years, online shops have been the biggest competition for physical retail stores, however as 2020 saw a large number of stores close worldwide, it became apparent that consumer spending behaviour and the way in which we shop had changed. 

Richard Kestenbaum, from Forbes Magazine asks the question what the future of the retail business will look like and whether or not they are needed at all.

For his article, he interviewed Ben Kaufman, founder of the retail business “Camp”, who explains that retailers should “event-ize” their stores, meaning they should create a space where people can have fun with friends and family by enjoying several activities. Women’s apparel stores for example could take advantage of fashion shows, customizations and performances by artists. Brands like Ba&sh have already worked on this kind of concept which is visible in one of the French fashion retailer’s stores in New York. There, customers can enter a “dream closet” where they can try some of the label’s signature items and borrow them for 72 hours. Monthly events for influencers and their friends as well as French lessons and pastry-making classes have also been in planning. 

Are retail businesses still needed?

These possibilities however got lost when the pandemic hit and in many countries physical shops needed to be closed due to governmental restrictions. Logically, those countries saw an increase in e-commerce revenues which is acknowledged by Petra Jílková and Petra Králová who wrote a report about digital consumer behaviour and e-commerce trends during the covid-19 crisis, published by springer publishing house.

According to them, in 2019 Europe was the third largest e-commerce market with a yearly revenue of 351, 9 billion US dollars. It was estimated that the market would experience an annual growth of 6%, leading to a revenue of 565.9 billion US dollars in 2025.

However, due to the pandemic, European e-commerce revenues already saw a growth of 10% only in 2020. In their report, which concentrates on Czech Republic, both authors further state that it is not only more people who shop online now but also that their frequency to do so has increased. 12% of their study’s respondents had shopped online before the crisis, while 43% do so since the pandemic began. 9.8% reported they had already shopped online weekly before covid-19, whereas 25% have only done so since the start of the pandemic.

It is easily understandable that consumers in general nowadays prefer to buy online because they are more afraid of infections and do not want to get in physical contact with many other people. Michaela Jefferson, writing for, summarizes the situation very well, stating that when making plans for the future and re-opening stores, retailers do not only have to make sure that people will return to the stores and not turn back to their digital shopping behaviour after a while, they also need to guarantee  that customers feel safe in the shop.

Social Media Impact

When speaking of the increasing revenues in e-commerce, it is of course impossible to exclude the impact of social media and influencers on consumers’ buying decisions.

Today, especially younger generations consider certain influencers on Instagram or YouTube as inspiration. As a result, they are more likely to buy products which are promoted by those influencers since they trust their recommendations, feel the desire to emulate them and enjoy the feeling of belonging to a community which is connected through certain products.

As Peter Roesler writes for, US consumers who use social media during their shopping process are four times more likely to spend more on purchases than those who do not. 

The impact of social media and influencers on consumers’ buying decisions has never been bigger.

Therefore, many companies consider social media marketing as the most effective way to reach their target group. Christine Moorman and Torren McCarthy, writing for Harvard Business Review, state that during the pandemic, social media has become critical to marketing in the US. While in February 2020 13.3% of marketing budgets were spent on social media, 23.2% were spent in June 2020 – an increase of 74%.

However, when thinking about launching a new brand these days or starting a retail business, difficulties to make yourself visible in the jungle of brands that are advertised on social media should weigh in where fashion brands are represented in immense numbers.

In general, the fashion industry is one of the industries which suffered the most from the pandemic. The State of Fashion 2021 report, written in cooperation by Business of Fashion and McKinsey & Company, published at the end of 2020, projected the industry’s economic profit to fall by 93% in 2020 after rising 4% in 2019. The high decrease in revenues can be explained by the fact that people did not see it as necessary to buy beautiful clothes when they could not go out and stores needed to close for many months. However, one fashion section that increased sales and became very popular during these times is home- and loungewear.

As Angela Gonzalez-Rodrigues writes for Fashion United, the sales of pajamas, loungewear and comfortable clothing have exploded and the global pajama industry which was worth more than 10 million dollars in 2019 is expected to be worth three times more by 2027. However, it can be seen as questionable whether this popularity will stay stable long-term once the pandemic is overcome. But one thing is certain, the rise of a modern conscious consumer.

Sustainability and Ethics

The popularity of sustainable and environmentally friendly brands on the other hand is expected to stay visible for a much longer time which is why in recent times many big companies came up with “green” campaigns and more transparent production chains.

Retailers need to accurately label products and educate their customers.

For an issue of the International Journal of Clothing Science and Technology in 2020, Kerry Bird and Jin Su investigated consumers’ behaviour towards environmental, sustainable and social apparel by collecting data from 399 US citizens. Their findings however included not only a positive attitude towards apparel sustainability but also a lack of consumers’ knowledge regarding social and environmental practices within the clothing industry.

It falls now on the retail business to accurately label products and educate the consumers about the label claims. 

Written by Miriam Chisti. First published on

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